Sen. Kelly Loeffler (R-Ga.) and her husband, Jeffrey Sprecher, purchased and sold about $1.4 million in stock during the market panic set off by the coronavirus pandemic, the Wall Street Journal reports.
Why it matters: Though the couple still lost money, they were able to limit the financial blow from the stock market's worst month since October 2008.
Details: Loeffler reported that she and her husband bought $590,000 worth of stock and sold about $845,000 from Feb. 18 through March 13, according to WSJ's review of the senator’s financial disclosure.
- If they held the shares they sold until March 31, they would have been valued at $86,000 less than what they sold them for.
- The stocks they bought declined after they purchased them and resulted in losses of $102,000 through March 31.
Loeffler and her husband sold stocks in retail stores, such as Lululemon and T.J. Maxx, and invested a company that makes COVID-19 protective garments for medical workers, according to a review by the Atlanta Journal-Constitution.
Of note: Sprecher is the CEO of Intercontinental Exchange, which owns the New York Stock Exchange.
During the same time period reflected on reports filed late Tuesday, the couple also sold shares in retail stores such as Lululemon and T.J. Maxx and invested in a company that makes COVID-19 protective garments. The Atlanta Journal-Constitution got the first look at these reports, covering mid-February through mid-March and shedding new light on Loeffler’s financial transactions during the pandemic. Previous reports — which have put Loeffler in the national spotlight — covered her trading during the first six weeks of 2020.
Loeffler provided the numbers to The Atlanta Journal-Constitution, and they were more exact than what would appear on a federal campaign finance disclosure.
The newer stock sales came as the broader markets were diving, and they are likely to fuel allegations that Georgia’s new senator used her insider knowledge about the severity of the pandemic to dump holdings while simultaneously releasing statements about the strength of the American economy and complimenting President Donald Trump on his response. The STOCK Act, a law that went into effect in 2012, makes it illegal for senators to use inside information for financial gain.
Loeffler and her staff have said she did nothing wrong. Her active portfolio reflects a woman of immense wealth who is confident in the market but also committed to following the rules, a spokeswoman said.
“Sen. Loeffler came to Washington on a promise to be a different kind of elected official,” Kerry Rom said. “She holds herself to high standards of ethics and transparency, including acting in accordance with both the letter and spirit of the law, which she has done at every step of her time in the Senate and in her lengthy career in financial services.”
It’s a defense Loeffler’s team has been making for nearly two weeks as government watchdogs and political opponents criticize her investments. There have been calls for investigations and her resignation.
The U.S. Department of Justice, in conjunction with the Securities and Exchange Commission, is looking into stock transactions by various lawmakers, CNN reported. That could include Loeffler, although her staff said recently that she has not been contacted.
Spokespeople for the Justice Department and the SEC both declined to comment. Investigations by the SEC are usually conducted in secret and not made public unless someone is accused of wrongdoing.
According to CNN, investigators have reached out to U.S. Sen. Richard Burr of North Carolina, who along with Loeffler has faced widespread criticism about stock trading. Transactions made by U.S. Sens. David Perdue of Georgia, Dianne Feinstein of California and Jim Inhofe of Oklahoma were also criticized, but to a lesser extent.
Chester Spatt, a professor of finance at Carnegie Mellon University, said all these senators could have avoided controversy by declining to buy or sell stocks in individual companies. Spatt, who served as an SEC economist from 2004 through 2007, said senators now must deal with the erosion of public confidence as a result of these transactions.
“This is why senators shouldn’t be doing this,” he said. “The burden is on them to demonstrate they were not using insider information.”
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